This invention pertains to a cash card system and, more particularly, to a cash card system providing a substitute for carrying and using currency, and affords the user both security and anonymity.
Everyone is acutely aware of the drawbacks of using or carrying cash in order to obtain goods and services. Cash is easily lost, stolen, or counterfeited. Credit cards are not much better than cash, because they too can be lost, stolen, or counterfeited. One of the advantages of using a credit card is that liability to the individual is often limited to a relatively small, predetermined amount (e.g., $50), but only if the loss is realized and reported promptly. Additionally, losses incurred by the banks are passed on to the cardholders in the form of higher fees and interest payments. It is obvious that a better card transaction system is needed.
Most recently, the use of cash cards has had some success, particularly in Europe. Cash cards, however, have similar problems to other credit card systems.
The present invention seeks to provide an improved cash card system substantially eliminating the need to use cash, that is safer and more convenient to use.
The cash card system of the current invention uses two cards: a cash card that is related to a second, security card. A magnetic stripe or chip on the back of the cash card contains the requisite information for making a purchase of goods or services at participating retailers. The security card is presented at any bank to obtain a refund for the cash contained in a stolen or lost cash card.
At the time of initial purchase of the cards from a vendor, like a bank, the purchaser is provided with a cash card containing an account number and an encoded or encrypted PIN number selected by the cardholder and known only to him or her. The purchaser selects and pays for the monetary value that is then entered into the cash card system. The card containing the selected PIN number and the account number is then activated as an authorization card for the cash card system.
The user purchases a dollar amount for the cash card, which is electronically loaded therein. This procedure is similar to telephone card systems allowing minutes to be pre-purchased. The cash card can also be used to encode the amount used in the course of purchasing goods and services, in another embodiment. The purchaser pays for the electronic cash by cash, check, or electronic transfer of funds. No identification by the purchaser is required to purchase the cash card, thus preserving anonymity. Once the second card is electronically loaded, the user can then use the cash card at any participating sales establishment simply by using the purchaser-assigned PIN to approve purchases. The user types in the PIN to activate and approve the purchase using the cash card. The approval for the purchase can be verified by subscribing retailers, who swipe the cash card through a card reading machine in order to verify that the PIN number is correct, and to debit the cash needed for the purchase. The amount of the purchase is immediately electronically approved and debited from the cash card. A running balance is maintained for the account held with the issuing bank or agency.
In the event of loss or theft, the cash card cannot be used without entering the proper and correct PIN number assigned by the cardholder at the time of purchase. A refund of the cash remaining in the account is obtained by presenting the security card to the subscribing issuer and verifying the PIN number contained therein. Therefore, either card is useless without the PIN. People using the card system will be instructed to keep the cards separated upon their person, or to leave the identification card at home, in order to foil theft and misappropriation. The PIN number will be encrypted and encoded on both the identification card and the cash card, so it will be difficult to determine the PIN without prior knowledge. The security card is used only to retrieve funds from the lost/stolen cash card. This feature keeps others from using the cash card without authorization from the purchaser.
Should the cash card fall into alien hands, its use would be prohibited by virtue of the need for the correct PIN, which must accompany the use of the card when making a purchase.
In the event of loss of either card, notifying the issuing bank or agency can void each card. A new cash card and/or a new identity card with a new PIN can then be issued to the user.
A lost cash card that has been partially used can be replaced with a new card loaded with the remainder of the funds, because a running balance is maintained by the issuing bank or agency. The transaction information at the time of each purchase is recorded so a running balance can be determined after each use of the card.
The cash card system of this invention affords persons anonymity and security. The user enjoys the same anonymity and protections of cash purchases without having to carry cash. The user also enjoys the convenience and freedom of card usage (e.g., paying at the gas pump). A user need not apply for credit and is not subject to xe2x80x9chitsxe2x80x9d on his or her credit records. The government, retailers, or other institutions cannot easily track purchases, card usage, its purposes, or the transaction locations, with respect to a specific individual. However, the individual can keep a running balance of his or her purchases.
Internet purchases are protected because PINs are required when using the card. Because the card system does not require any identification to purchase and/or use the cash card, it further protects a person""s identity by maintaining the identifying PIN code separate from the sales transaction. The cash card is not encoded or encrypted with any personal user information (e.g., name, date of birth, social security number, etc.).
The problem of identity theft is a growing concern for Internet users and consumers. This card system provides electronic purchasing power without revealing any personal information. At the same time, immediate payment to the retailer or seller is ensured.
The card system of the invention is designed to clear through an issuer, like a bank, credit union, financial institution, or other commercial agency, where the cash card is purchased. The card is designed to have an unlimited or limited life. It can be renewed or xe2x80x9creloadedxe2x80x9d upon the payment of cash or transfer of funds. The credit- or debit-type plastic card can comprise a magnetic stripe or electronic chip. An electronic device (similar to a mini-calculator), displaying the account balance, can also be used as a cash card. The type of card used will depend on the issuer""s preference and the amount the purchaser wishes to spend in order to belong to a particular cash card system. Financial institutions will report all cash transactions in excess of $10,000, as required by law. Retailers and sellers will obtain personal information if a purchaser completes a transaction in excess of $10,000, as currently required in regular cash transactions.
The use of traveler""s checks is a cashless system similar to the invention. Traveler""s checks contain identification numbers identifying the purchaser and the cash amount. Should any one of the checks become lost or stolen, the purchaser can call the issuing bank or American Express, and obtain a refund. The purchaser is given a receipt with the identification numbers disposed on the checks, and is instructed to maintain the receipt separate from the checks. This system incorporates the best features of credit cards, traveler""s checks, and cash: the anonymity of cash, the security of traveler""s checks, and the convenience of credit and debit cards.
In accordance with the present invention, a card system is described in which two separate cards are issued to the user. A magnetic stripe, bar code, or chip is disposed on the back of each card. As used herein, the term xe2x80x9celectronicxe2x80x9d is meant to include any optical, magnetic, electrical, mechanical, or electronic means by which information is stored, accessed, or transferred with the use of computer technology. The stripe on the cash card contains the requisite information for xe2x80x9cclearingxe2x80x9d it at any bank or retailer. At the time of the initial purchase, a second card is issued. The second card is a security card containing the cardholder""s account number and the selected PIN. This card is for retrieval of funds only, not for purchases. The user purchases goods or services worth a given dollar amount with the cash card at any participating retail establishment, and the cash purchase is debited from the account. This procedure is similar to telephone card systems allowing minutes to be pre-purchased.
The purchaser can pay for the electronic funds by cash, check, or electronic transfer. Once the cash card is electronically loaded, the user can then use the cash card at any participating sales establishment simply by using the selected PIN to approve purchases. The user types in the PIN to activate and approve the purchase. Purchase of goods or services are validated by a subscribing retailer who swipes the cash card through a card reading machine, verifying the PIN provided by the cardholder. The amount of the purchase is immediately electronically debited from the cardholder""s account. A running balance is maintained by the card issuer (bank, credit union, financial institution, etc.).
In an alternate embodiment, the two-card system can be used as a more conventional credit card, in which purchases are encoded on the cash card upon use, and the security card provides the same functions hereinbelow described.
In the event of loss of the cash card, it can be replaced by presenting the security card with its identifying PIN code and the user identification or account number contained in the security card. The term xe2x80x9cidentification,xe2x80x9d as used herein, is intended to mean non-personal information, but does not necessarily exclude personal information. The PIN is encoded or encrypted within both cards so unauthorized individuals cannot easily determine it. People using the card system will be instructed to keep the security card separated from the cash card, in order to foil theft and misappropriation. The security card would be best left at home. Should the cash card fall into alien hands, improper or unauthorized use of the cash card would be prohibited by virtue of the need to key-in the correct PIN when swiping the cash card for purchasing goods or services at the participating retailer.
It is an object of the present invention to provide an improved cash card system.
It is another object of this invention to provide a cash card system affording the user a combined increase in security, convenience, and anonymity with the card""s use than with any financial transaction system currently in use.